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Friday, 04 December 2020

Egypt: Maintaining production in the crisis

Preserving Egypt’s industrial production and exports is a top priority during the Covid-19 crisis, according to experts at a recent seminar

Ahmed Kotb , Thursday 23 Apr 2020
Maintaining production in the crisis
Production resumes against all odds (photo: Reuters)
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The Ministry of Trade and Industry has been taking measures to stabilise Egypt’s industrial production during the Covid-19 pandemic, said Nevine Gamea, the minister of trade and industry.

Stretching work shifts in factories to three instead of two to increase production capacity and reducing the number of workers on each shift to guarantee social distancing and limit the spread of the coronavirus were measures that had been implemented, Gamea said during a recent online seminar organised by the Egyptian Engineering Export Council (EEEC).

“The ministry is committed to continuing production in the manufacturing and commercial fields, while also preserving the health of workers by guaranteeing appropriate environments that take preventative measures into account,” she said.

Some factories were shut down this week for sterilisation after reporting coronavirus cases among their workers, and thousands of workers have been put in self-isolation for 14 days.

Gamea said the government was closely monitoring developments related to the cases and was working to support local industries, notably by reducing imports and removing tariffs.

She said the ministry was working to settle arrears worth about LE1.5 billion and payable to 1,777 export companies by the Export Development Fund in order to provide further support for Egyptian exporters suffering from the worldwide impacts of the coronavirus pandemic and to help them meet production and wage costs.

The government was studying what would happen after the end of the coronavirus crisis and looking at ways of strengthening local industry, reducing imports, removing customs obstacles, and providing incentives for industry, she said.

She said that imports had decreased by 24 per cent during the first quarter of 2020, which had given local industry the opportunity to increase production to meet the needs of the local market in line with the ministry’s strategy to replace imports with local products.

There had been reports from a number of exporters saying they had succeeded in opening new markets in countries whose production had been slowed as a result of the current crisis, she added.

“This crisis is unprecedented and has greatly affected industrial and production sectors worldwide. But Egypt is one of the countries best positioned to deal with the crisis in terms of its response speed and taking the necessary precautionary measures,” Gamea said.

“We are trying to find the best way to deal with this crisis, but as of now we do not have specific answers,” Ahmed Fikri Abdel-Wahab, chair of the advisory board of the School of Business Administration at the American University in Cairo (AUC), said during the online seminar entitled “Crisis Management: Challenges and Opportunities”.

A survey conducted by Abdel-Wahab for members of the EEEC said that the most important decision taken by the government for companies was the disbursement of 30 per cent of their dues by the Export Development Fund. This was followed by the recent reduction in electricity prices for factories that had helped decrease production costs.

Postponing loan installments for a period of six months without applying additional fees for late payment had also helped companies to stay in business, according to the members of the EEEC who participated in the survey.

They said that increasing local manufacturing to ensure the maintenance of production and opening new export markets had been top opportunities for local manufacturers in the current crisis.

Abdel-Wahab said there were best practices for dealing with the crisis that companies could employ. There should be a dedicated team within companies to manage critical events and deal with any future crises like the one caused by the coronavirus pandemic, he said.

“The current crisis will likely continue, and so should our search for solutions,” he concluded.

 

*A version of this article appears in print in the  23 April, 2020 edition of Al-Ahram Weekly

 

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